IRLANDIA BINGUNG CARA HABISKAN UANG ! NEGARA INI ALAMI SURPLUS SAAT NEGARA LAIN KRISIS EKONOMI

Summary

Ireland's economic situation has been shaped by its low corporate tax rate, attracting major companies like Apple and Google. This led to substantial surpluses, with government revenues from corporate taxes rising significantly. However, this surplus has sparked concerns about inflation and economic instability. The country is now grappling with issues like high housing costs and homelessness, while also facing external risks, such as potential tariffs from the U.S. government under President Trump. To address these challenges, Ireland plans to invest in infrastructure and public services, but must navigate the complexities of managing a growing economy and surplus.

Takeaways

• 😀 Ireland's low corporate tax rate of 12.5% has attracted major multinational companies like Apple, Google, and Meta, significantly boosting tax revenue.
• 😀 Ireland's corporate tax revenue grew from €7 billion in 2015 to €24 billion in 2023, with expectations to reach €30 billion by the late 2020s.
• 😀 The large tax surpluses have created a dilemma for Ireland, as the government is concerned about managing excess funds without causing inflation or economic instability.
• 😀 Despite the surplus, there are growing concerns about income inequality, housing affordability, and public infrastructure in Ireland, especially due to rising homelessness.
• 😀 As of June 2023, Ireland had around 12,600 homeless individuals, with most being immigrants without official documentation or housing.
• 😀 Ireland's housing market is facing a crisis, with high rental prices—up to €30,000 per month for a single-bedroom apartment in Dublin.
• 😀 To avoid inflation, Ireland has decided to invest part of its surplus in national wealth funds, similar to Norway's sovereign wealth fund, aiming to reach €100 billion by 2040.
• 😀 The Irish government is increasing public investment in infrastructure, energy credits for households, child benefits, and income tax thresholds to stimulate domestic economic activity.
• 😀 The rise in Ireland's tax revenue is largely due to the large number of US multinational companies operating in the country, creating jobs and producing goods for export to the US.
• 😀 The potential re-election of Donald Trump and the threat of 20% tariffs on European goods could pose significant risks to Ireland's economy, particularly its reliance on trade with the US.

Q & A

What was the primary reason behind Ireland's decision to lower corporate taxes in the 1950s?

Ireland lowered corporate taxes in the 1950s as part of an economic strategy to attract foreign investment and boost its economy, especially during a period of welfare cuts and increased taxes on citizens.

How much did Ireland's corporate tax revenue increase from 2015 to 2023?

Ireland's corporate tax revenue increased from 7 billion euros in 2015 to 24 billion euros in 2023, a significant rise over just 8 years.

What was the impact of low corporate taxes on the presence of major companies in Ireland?

Low corporate taxes made Ireland an attractive location for multinational companies like Apple, Google, and Meta to establish their European headquarters, contributing to the country's economic growth.

What was the concern that arose with Ireland's growing corporate tax revenue?

The concern was that Ireland's reliance on a small number of large companies for a significant portion of tax revenue made the country's tax base narrow, potentially leading to economic instability if these companies were to leave.

What steps did Ireland take in 2021 to address its low corporate tax rate?

In 2021, Ireland decided to slightly raise its corporate tax rate, though the increase was not significant, to ensure long-term fiscal stability while maintaining competitiveness.

Why was the surplus in Ireland’s economy considered problematic?

The surplus posed a potential risk of inflation if not managed properly. With too much money circulating, there was a danger that the economy could overheat. Ireland also faced the challenge of wisely allocating the surplus to avoid economic instability.

How did David, the economic expert, suggest Ireland should manage its surplus?

David suggested that Ireland should use part of its surplus to address infrastructure issues such as public transportation, housing, and to reduce the high levels of homelessness, which had become significant challenges in the country.

What role does housing affordability play in Ireland’s economic concerns?

Housing affordability is a major issue in Ireland, with high rental prices, especially in Dublin. The lack of affordable housing is exacerbated by a growing number of homeless people, and it contributes to social instability.

What measure did the Irish government take in response to rising living costs and the energy crisis?

In response to rising living costs, particularly energy costs, the Irish government provided energy credits to households and increased child allowances, in addition to raising income tax thresholds to help families cope with financial pressures.

How might the election of Donald Trump as president impact Ireland’s economy?

If Donald Trump were to impose tariffs on goods from the European Union, including Ireland, it could negatively affect Ireland's economy, as the country relies heavily on trade and investment from American companies, potentially leading to significant losses in corporate tax revenue.